Published on: April 21, 2023

Private sector urged to become engines of growth in Sri Lanka’s economy

  • Calls for strong export-oriented economy.
  • Modernization of traditional sectors for Sri Lanka’s growth – President emphasizes at the Business Today Top 40 Awards Ceremony.

During his address at the Business Today Top 40 Awards Ceremony at the Presidential Secretariat in Colombo yesterday (20), President Ranil Wickremesinghe highlighted the need for a strong, export-oriented economy. He emphasized the importance of engaging in comprehensive economic and technological collaborations with India and negotiating entry into the Regional Comprehensive Economic Partnership (RCEP), while maintaining RCEP standards and remaining open to possibilities.

Furthermore, the President emphasized the need for modernizing and updating traditional sectors such as agriculture, fisheries, logistics, and tourism. He also urged the private sector to submit proposals for becoming the engines of Sri Lanka’s economic growth.

President Wickremesinghe also discussed the challenges that Sri Lanka faces this year and called for private sector involvement in tackling these challenges. He revealed that the government has set aside a billion rupees for Artificial Intelligence (AI) next year, with a focus on green energy technologies and renewable energy. The President also outlined the government’s plans to pursue the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) after RCEP, for which the government has already established criteria.

President Ranil Wickremesinghe presented Awards to 40 Veteran Businessmen at the Award Ceremony.

This event was attended by Ven. Uduwe Dhammaloka Thero, Deputy Minister Diana Gamage, Members of Parliament Vajira Abeywardena, Dayasiri Jayasekara, Udaya Gammanpila, Sarath Weerasekera, Premanath .C. Dolawatta, Senior Advisor to the President on National Security and Chief of Staff to the President Mr Sagala Ratnayake, President’s Secretary Mr Saman Ekanayake, Southern Province Governor Mr Willie Gamage, Former Ministers John Amaratunga, Arjuna Ranatunga and Veteran Businessmen including Mathi Parthipan and Glenda Parthipan.

Following is the full speech made by President Ranil Wickremesinghe at the Business Today Top 40 Awards Ceremony;

It has been two years since our last meeting, and looking back, I don’t believe anyone could have predicted the outcome of the past difficult years. Today, we gather here having just navigated our way out of the crisis we faced. However, we still have a long way to go before we can achieve a stable and fast-growing economy.

During this time, the Secretary to the Treasury, the State Minister, and the Governor attended the Spring Session in Washington and received encouraging messages from many multinational organizations that are willing to assist us. However, there is one condition that we need to fulfil, which is our agreement with the IMF.

Recently, I had a Zoom meeting with the Japanese Minister of Finance, India’s Minister of Finance, and the Head of the Paris Club in France, who represented all the creditors. They encouraged us to move forward, and we are also in talks with China, our other main partner, to join us in resolving this issue.

We will move forward together and individually, and the progress we have made so far has impressed many. In a short period, we turned the situation around through common sense and tough decision-making. This was probably the most challenging phase of my life, surpassing even my time in the Ministry of Education.

We had to make decisions that adversely affected a segment of the population, but in the long run, it was necessary for the betterment of the country. In the medium term, we can expect to see positive results.

There are two main challenges we face, the first being revenue. Despite everything, we need money. Therefore, we must find ways to increase revenue. Personal and company taxes were raised as the only viable solution at the time, although it is not a perfect solution. We hope to have a better revenue collection system and tax structure in the future. Currently, the Treasury is focusing on revenue collection, and we aim to make improvements this year.

The second challenge is debt restructuring, and there is no need to fear it. As we move forward, we must address the issue of salaries for the government’s 1.7 million employees, some of whom will retire while others will find new jobs. The government’s expenditure on the armed forces is also a concern, but we have calculated that by 2028, this issue will be under control. However, the larger concern is the amount of money we will need to pay salaries and pensions for those who will retire in the coming years. According to Treasury estimates, we may run into trouble from about 2030 onwards.

Therefore, this is a crucial issue that we must address. We can restructure debt and increase revenue, but we must also focus on the budget and retirement benefits for current employees. Despite these challenges, we will still need to obtain loans from time to time as we move forward.

Our balance of payment is not currently in our favour, so the next step we are taking is to implement reforms and restructuring to create opportunities for growth. Our immediate action this month has been to present the IMF arrangement to Parliament and request support. By the end of next month, we aim to have our growth agenda ready, with the Economic Stabilization Committee having already prepared their report and other drafts being reviewed and amended by the President’s Office and other stakeholders.

Looking towards the long-term future, we have set our sights on 2048, as well as the next five and ten years. Our plan is to open up the economy quickly by removing many of the barriers and hindrances that have been present for the past few decades. Our goal is to become a dynamic and export-oriented economy, with major initiatives such as entering into a comprehensive economic and technological partnership with India and joining the RCEP (Regional Comprehensive Economic Partnership).
Our objective is to reach the RCEP standards and eventually join the Comprehensive and Progressive Agreement for Trans-Pacific

Partnership (CPTPP) as well. To achieve this, we must modernize traditional industries such as agriculture and fisheries, develop a new approach to tourism and logistics, focus on green and renewable energy, and prioritize artificial intelligence by setting aside a billion rupees next year for this purpose.

To support these initiatives, we need a skilled workforce, including 10,000 engineers and 5,000 doctors annually, along with IT technicians and other professionals. The government currently operates around 400 vocational and technical training institutes, which may require running two shifts and partnering with the private sector to meet the demand for skilled workers.

As we open up the economy, we are leaving the burden of growth to the private sector, and we expect each of you to contribute to this vision. We will be seeking your input and participation in the coming months, as we work together to build a new future for our country.

We will engage with all of you, and the country will be watching closely. If you want the private sector to be the driving force behind growth, then you need to devise a plan and deliver results. I do not want to take up more of your time. I just wanted to give you an overview of what we intend to do and what we have done.

There have been many queries regarding the growth agenda and our plans for other issues. So, here we are. We are ready to move forward, and we will be consulting with you all in the next few months to determine your contributions and roles in the new economy.

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